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The Journal Editorial Report

News/Business. Paul Gigot discusses news, politics, society and finance. (CC) (Stereo)

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United States 12, California 11, Washington 8, Obama 8, Europe 7, America 6, Us 5, Virginia 5, Maryland 4, Iran 4, Barack Obama 4, Jason 4, U.s. 3, Dan 3, Michigan 3, South Africa 3, New York 3, Illinois 3, Syria 2, Georgia 2,
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  FOX News    The Journal Editorial Report    News/Business. Paul Gigot discusses news,  
   politics, society and finance. (CC) (Stereo)  

    December 29, 2012
    8:00 - 9:00pm PST  

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condition has improved enough for him to be moved back into a regular hospital room. president bush hospitalized in november for treatment of bronchitis-related cough. and in our nation's capital, law i can makers meeting outside of cameras and microphones, so we don't know whatey they are saying, but we know they arote negotiating. coming up with ways to prevent tax hikes and spending cuts if no deal is reached before then. mitch mcconnell telling us they have been going back and forth all day and talks are continuing into the evening. no major progress though yet to report. and that is how fox reports on this saturday, december 29th. i'mm harris falkner. tomorrow, tune in for a specialal two-hour fox report as the fiscal cliff deadline nears on the eve of the last stock market day of theae year. we will be all over it with deadlines and they are trying to get a vote, something together. "huckabee" starts now. >> this week on the journal editorial report.
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a look back at the year that was and what is ahead for 2013. 2012 was a tough year for conservatives on the national level, but in the states, some hopeful signs of reform, and looking forward, is the economy headed for rebound orie session? will the new year bring a with iran? our panel is here with their prediction. welcome to this special edition of "the journal editorial report" as we look back at the year that was and the challenges that face us in 2013. first to our stories of 2012 and america's left turn from the supreme court's landmark health care decision to the re-election of president barack obama, politics on the national level headed in a decidedly liberal direction. so what happened? and what does it mean for the country going forward? joining the panel this week, "wall streetf journal" columnist and political diary
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editor jason riley and washington columnist kim strossel. dan, we would like to say for a longtime we live in a center right country. if you l look at the last two presidential elections, that doesn't seem to be the case. are we living in a new progressive era? >> in terms of the presidency, i think we are, paul. i am not sure about the country. i think what barack obama has in mind to do is indeed to redistribute income from the top downward and not to cut spending, but to increase spending. it is explicit from historic 20% of gdp to 25% of gdp. rather than cut spending, raise taxes as necessary to support the spending. and i would say that is in fact the french model. the question is whether that model can produce enough growth to support jobs in the economy.en >> noen question, jason. taxes are going up. we know that.
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spending going up for sure even before the health care law kicks in. so we are moving in that direction, particularly in the entitlement state. >> right. >> not reforming it, but actually expanding it. >> what happened was the supreme court helping this along. t you had the justices essentially rewrite legislation. changing the tax congress passed to declare obama care constitutional which is a littleec scary that the highest justice is -- justices in the land would take the activist roll. that's what is scary. the backdrop of the presidential year was europe. we know where this path leads. all this turmoil, the huge welfare and the low productivity and high unemployment that comes along with them, that was the backdrop of the presidential campaign. voters voted, and they said, yes, we are going to keep moving in that direction, kim. where do you think the
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electorat is here? is it be ibd hue the choices that -- is it behind the choices that jason suggested they might be? >> barack obamaus won this election by very effectively making this a referendum about his opponent, mitt romney. if you went out and asked most americans, do you think barack obama did a great job in his first term? do you want significantly higher taxes? do you want the government to do nothing about spending? are you happy with obama care? most would say no. but in the end the choice was between a president who said things aren't great, but i'm going to still try to make them better, and a guy who he painted as not having a plan and not identifying with the average wants and needs of most middle class americans and in the end people decided to stick with the devil they knew rather than the one they didn't. >> so the republican defeat was big, but it wasn't overwhelming in the sense of a repute yags, in your view, of the republican platform or their agenda.
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>> no, and i think the reason -- look. this country did have the opportunity to once again hand controlled government to democrats. everyone in the house was up for re-election, and yet they continued to givene republicans the majority. they like divided government, and they have to look at the states who elected the very conservative governors who are doing the exact opposite of what barack obama is doing at the federal level. jay dan, there are real implications, consequences to the direction, the policy direction of the president's setting. there will be a lot less money for defense. so the american ability to project power abroad is going to decline and maybe rapidly. the key question, of course, economic growth. can we get out of this 1.5% to 2.5% ban we have been in, and break out of that? if we can't, the kind of commitment the government is making will be unaffordable. >> i think we have previously cited the nobel loriat in
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chicago who looked at this closely and said why are woo we not getting economic growth in the united states? he cited europe which in the 1970s fell off its growth path around 3% after world war ii, and he concluded it was because as jason was suggesting the welfare commitments they made. it was unsustainable, and their growth rate dropped permanently. and lucas raised the question whether the united states itself was on the lower long-term growth path. that's the question.we >> jason, where do we go from here? particularly if you are a conservative, where does the come back begin? does it begin and somehow accommodate the middle and saying,gi look, it is progressive, and we have to be a little less aggressive and efficient in terms of administration, or do you put bold colors out as an alternative? >> i think it starts with the gop expanding its current coalition. i think hispanic voters are one way to go. you have to remember just
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eight years ago 44% of of hispanics voted for the presidential candidate. four years ago it was 31%. this year it wasbl 27%. this is a swing voting block and the republicans need to go after it b. paul i consider the recognition of a problem to be progress in and off -- in and of itself. and maybe the gop is going to finally reach -- come to grips with the demographic reality. >> i think so. dan, what about this idea of go to the middle or do you fly with both colors? >> it is hard to go entirely to the middle. the ones who did not vote for barack obama voted against this vision and voted against it very strongly. i think the republicans would put that s at risk if they went too far to the middle. when we come back, states of change from kansas to michigan to rhode island. reform is in thes air.
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find out how some states are bucking the washington trend next.
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washington may have made a big left turn this year, but in states across the country, another kind of reform is in the air. we begin in mech mitch which this month -- in michigan which was the 24th right to work state. we are back with jason riley and kim strossel and senior economic writer steve moore also joins the panel. steve, this is really an interesting story that i don't
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think gets of attention. the reforms taking place across the country in a>> lot of states. who are the stars you are looking at? >> i entirely agree with your premise, paul. if you talk about the demise of the republicans on the national level, we are not really seeing that on the state level. 30 republican governors today in america. the republicans actually picked up a governorship in north carolina. so the south now is almost entirely republican whereas justen 25 years ago it was pretty entirely democratic. it is not just the south. states like utah and idaho and others. >> what are they doing with that power? that's the interesting thing. >> so they have the power, and they are using it. you have states like kansas and florida that have been cutting taxes aggressively to promote jobs. you have a lot of the states in the mountain states that are republican and are aggressively promoting pro energyer drilling policies to get at the pir natural resources. and the big story you
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mentioned was what is happening with right to work. and it wasn't just michigan. sometimes we forget that earlier indiana was a right to work state too. so two midwestern states that are traditionally m heavy unionized moved to the right to work. i wouldn't be surprised if we see a couple more states fall. >> interesting i contrast in maryland and virginia. in virginian you have republican governor cutting taxes and cutting spending. you have a liberal governor who has raised income taxes, gas taxes and as a result virginia has a job growth rate that is three times that of maryland. virginia hasra a lower unemployment rate. you can see that contrast, and i think in this election it actually worked the present benefit in some of these swing states like ohio and virginia where you had voters in those states experiencing above average economic growth y thanks to the policies of the republican governors. >> then you see the
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alternatives. let me talk about the one state really pushed through a terrific pension reform, probably the best in the country. but if you loo tk at other states where the democratic coalition is dominant, illinois for example, new york state and california you can see a very different policy mix. which direction are they going? >> their policy mix is to mirror what is happening in washington. do not address any of the structural spending problems. continue to add spending and then ask your taxpayers, the healthier of the taxpayers to contribute more money.-- one of the problems these states have is obviously it is not helping their economic growth, and you are beginning to see a huge contrast on the ground between the economic situations of states that are reforming and some that are not. >> where is the growth occurring and where you arel:
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seeing it?h the jobless rate in illinois last time i checked was 8.8%. wisconsin was 6.9%. very interesting contrast. >> indiana where it is also low. north dakota which steve mentioned the fracking boom, it is below 5%. it is astonishing. >> it is 3%. >> so what about steve where do you think this is going? we are going to see now over the next two, three, four years. >> n ao doubt about it. >> what laboratories work and whatou laboratories don't. >> no question about it. i think this is the big story in america, paul. i was i talking about the red states getting reder, the blue states like california and new york and, my home state of illinois got bluer. republicans are endangered species in those states. and now you have a very sharp
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contrast. it is an almost economic vulcanization. california passed a massive tax increase, and i think more so than any other time in our lifetime, paul, you will see a very divergent path taken by states like california that are very liberal, and some of the states in the south that will promote tax cuts, reductions in pension class, and i think it will be a real experimente to see which models work. >> do you predict california will not get down from the jobless rate and will see an out flow of capital? the state still has tremendous resources in agriculture and high-tech obviously and the hollywood area. are you over doing some of the pessimism here about california? >> no, i do not think -- i think it is hard to see any optimistic forecast for california. everywhere i go, and as you know i go all over the country, i can't tell you how
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many times i run into businessmen who say i used to be in california. now i am in texas or now i am in virginia or now i am in florida or nevada. i think that state is in real trouble and it has big implications for the national economy. if california isn't growing, it is hard for the nation to grow. >> i agree with that. it is a real setback if california keeps growing slow. kim? >> well, you mentioned maryland. we are talking about an out flea. an out flow. the democratic governor there, o'malley isno a mini me barack obama. he instituted a millionaire's tax. all of the millionaires left maryland. so we know that this is what happens. >> he is a maxi-mini barack obama. and he wants to go to the national level. i think he has his eye on 2016. when way come backna from -- when we6. come back from energy to c education, it is picked for the good news stories of the year.
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well, just when you thought there wasn't all that much to cheer about in 2012, a panel is here with some good news. "wall street journal" editorial board member starts us off. what is your big good news of the year? >> it is a high energy story. >> just like you, high energy. >> basically we have through technology, the united states has discovered it has a huge amount of both shell oil and shell gas, and it can get it out of the ground. as i say thanks to technology. and that's not just a u.s. story. it is a north american story. there was a ton of oil in canada. there is the same geological formations in mexico.
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there is a lot of energy that can come upe'. the ceo of flor says there is at least $30 billion of potential c projects around the u.s. gulf of mexico. >> u people say by 2020 we could be self-sufficient in terms of providing most of the oil and the gas we get domestically. what are the implications of this for the larger economy? things like manufacturing and consumer prices? >> certainly obviously residential heating and things like that would be more affordable and make us more competitive and manufacturing and that has to do with exports. we could actually become the leading producer energy for the emerging markets. energy demand in this country is going down, but in the rest of thegy world it is going up. this would be any senator
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muss -- ant' enormous source of jobs and tax revenue. >> and the big threat to this is politics. if somehow regulators get in there and say for whatever reason we are going to stop this shale gas revolution, and there are opponents of this, the sierra club, a lot of environmentalists want to kill this. there is a more for yum on -- mora moratorium on hydrolic fracking. it ites booming. >>nn one example in california there is something called the monterey shale. it has more reserves than the balkin in north dakota and the texas reserves put together. but there is real questions aboutht whether the californian viern mental lists -- environmentalists will allow us to go after it. >> i think the answer is no. keep the good news coming. is more on the education forefront. i should specify there was a ballot initiative passed, a state with no rt chaer schools at all would allow the
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creation of them. in georgia you had a ballot initiative that would spapped the current number of -- expand the current number of charter schools. and then in louisiana there is a statewide voucher program expanded. it was signed into law by bobbie gindle. it will give people p better access to t schools. >> why this momentum now for the school choice whether charters or vouchers. what is behind it right now? >> i think it is the track record of the system, the status quo. and the more we talk about the reality of options out there for people. in georgia one in three high school freshmen does not graduate in four years. i mean, it d is incredible. in louisiana, something like 36% of schools were ranked d or f by the state. it is just hard to -- >> which might be graded on a curve. >> it is hard to defend those kinds of results. that's why i think t the
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momentum is with reformers. >> s io liberals mugged by reality. not just liberals, but parents too. this is interesting to me. you have seen seen hollywood change. culturally they tend to be opposed to this kind of thing, but they have turned and said, you know what, maybe appearance -- they have the parent trigger movie, and maybe we are seeing a change in direction and that is a tipping point in this debate. dan, can you match those two? >> i think i can. that is one example. in the world of technology, and here is a pure good news story. there is a company who this year came out with a robotic arm who attaches to the arms of those whoh have had strokes. they are paralyzed. it allows the brain to transmitd. nerve signals to the muscles in the arm and the robotic arm picks it up and allows the arm to move. this is the most extraordinary thing. we are able to do that sort of thing. another example is 3d printers which i think i can explain.
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you take liquid plastic. you design something like say a plastic pin. you pour the liquid plastic in and the 3d printer outputs an object. this could revolutionize manufacturing. it is just beginning to come out in productivity right now. these are the source of ideas that are based on the knowledge you produce in the united states. as we know knowledge since the industrial revolution has been what has drirch economies forward.nd and it is still possible in the united states.s >> we had visitors here, and i was struck by two, and what they describe as a world of moore's law where computer power will double, i forget, every couple of years, is going to continue and roll through our economy. so you are going to have this digital revolution producing things like voice recognition and things that will transform the way we live our lives.
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that matter even if the economy keeps growing at 1% or 2%. the big question is is that growth and innovation going to happen in the united states, or moreover seas in places like china? >> well, take the robotic device . this is a medical device. under the obama care law medical devices will be subject to attacks because they have to pay for obama care. this is the sort of thing that if we keep doing will suppress the growth of technology in this country, and then there is the issue of immigration policy. a lot of this technology drefn drefn -- t driven by engineers and silicon valley has been the result of immigration in the united states. if we don't stand in front of these things we can grow. >> thank you. coming up in our second half hour a look ahead to 2013.k is the economy poised for a come back, or will slow growth and high unemployment continue to drag us down? and get ready for obama care. what you need to know as some key provisions kick in.
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it was terrifying moments at a phoenix bank. workers arrived to find one of their co-workers with a device around her neck, but the device was harmless. she was taken hostage the night before and held against her will overnight. police say the man who did it took her to the bank this morning and left her there.
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he remains at large. pilot error is suspected it in a jet crash that killed four people at russia's third busiest airport. four others were badly hurt. the red wings airliner slid off the runway at the airport just outside moscow. the plane landing partly on a highway before breaking into pieces and catching fire. officials say there were only eight people on board because the jet was returning home from the czech republic with no passengers. i'm marianne rafferty. now back to "the journal, editorial report." for the latest news log on to fox news.com.o welcome back to this special edition of "the journal editorial report." if you haven't checked your 401k lately, you may be pleasantly surprised. 2012 it turns out was a pretty good year for the markets. despite continued high unemployment and slow economic growth. what can we expect in 2013? we are back with dan and mary
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and steve moore. mary, explain this seeming contridiction between slow growth and buoyant markets. >> first of all with respect to the markets, i would say that if you look at a chart of for example, if you go back to say april of 2011 until october of 2012, you arke basically flat. there has been a lot of churning up and down. the s&p 500 index was a lot higher. in the last few months we have seen a little pick up there. certainly from the end of -- from the beginning of this year you saw a run in the market. you don't have a great return if you are a long-term investor. >> okay. but if growth is still slow, and some people are still investing in p cs. the corporate balance sheet earnings have been pretty good. they have cleaned out a lot of the debt from the crisis. could we be poised here for
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faster growth going forward? >> i think one of the things that explains why the corporate sector is doing well is they have access to money at 0 interest rates. that's not true for the broader population and not true for a lot of businesses. it is just true for large corporations that can barrow very cheap money. you have high unemployment that means the employers can ring more productivity out of their workers because the workers need jobs. so if you take those factors into account, you are not looking ato an environment that is as bullish for the broad americanir public as it might seem looking at the stock market. >> one of the economists i follow points out there has been 312 easings of one policy stimulus and central bank easings over the last 16 months. 312. so one answer to this question may be that there is an awful lot of money sloshing around
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from the central banks around the world who are saying, look, we have to drive this economy, and they are opening the spicketts. >> they are opening the spicketts, but what is happen together capital? being deployed for the productive uses? in the case of the united states what we have seen, what has been written about is many companies have spent hundreds of billions of dollars buying back their own stock. they have been borrowing this mone oy cheaply and using it to buy back their own stock rather than investing it in productive capital projects. and there is a school of thought that says most of the growth in the stock market is most of the companies have been buyers of stock whereas retail investors or even mutual funds have been net sellers of stock i. we are not in a productive economy. >> we have seen investment in economy. what about our favorite bull? what do you think? is 2013 going to turn the corner in a better direction
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like ben better -- bernanke and the other head chairs are saying? >> we haven't had a real recovery in four years. we really haven't. you just get the feeling that the economy is ready to pop. the argument though is everything washington is doing is holding back this expansion. that'sou the frustration investors and businesses feel. on the positive side you have the energy -- i highly agree with your conversation that technology are just drivers ofy high how perked -- high powered growth. but the force are the higher tax rates that are coming in 2013 and some of the regulation s in sew bough ma care are holding back -- in obamacare are holding back the willingness to expand and hire morene workers. >> and there is going to be a huge regulatory wave to finish out the dodd frank financial reform. there is a hugee, pinned up wave on energy. all kinds of rules hitting utilities and energy companies. so who wins?
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washington orng the private economy? e >> i think actually if you look at ate couple of indicators it is not good for at least the first half of 2013. one is business investment. business investment is now weaker than it was in 2008. so you have lots of companies sitting on their hands. you have small business confidence o taking a huge hit in november which is very worrying. and personal per cap tau personal income. >> it is still down from even at the start of this recovery. steve, you wanted to get in there? >> let me be the bull here for a minute. we talk all the time about the energy story. it is not just the energy sector that is affected by that. we have had a minute gnaw renaissance of manufacturing in this country. and the transportation is because of the fact that energy prices havein been falling, and it makes american manufacturers much more competitive. i think 2013 is going to see continued declines in energy places.
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>> but the thing we haven't mentioned here is unemployment. it means a lot of people are out of jobs. we would need a tremendously bullish economy. likeno 4% that would produce enough jobs. it would take a decade to get back to where we were before this recession. we need to do whatever it is we can to allow economic growth in this country. >> declining energy prices are not good for energy production. at some point, the energy producers will say the price is too low and to mitigate that problem you have to be able to export. the obama administration needs to decide if they could export. >> that's ahe key policy move. still ahead, the new world disorder as the arab spring continues to de tear yes, sir rate -- de tear yes, sir rate and iran continues to impress.
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from iran's nuclear ambitions to china's national impulses will bring a new year of foreign challenges. it is what is likely to be the biggest "wall street journal" columnist, brett stevens and the editorial board member. brett, the world safer now than it was a year ago? >> think about it, we are that much closer to a nuclear confrontation with iran, where the regime will cross the threshold where somebody will stop the regime. you have the chinese making trouble for japan over these islands and making trouble for the philippines and making trouble for the vietnamese being uher is tiff -- being assertive in what they consider their territorial waters. many think it is international
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waters. it is a scare yes, sir place. there is -- scarier place, and there is disorder in the world. >> and the middle east. there is so much concern about the arab spring a year ago. a lot less promising now. >> sure, you have the problems in egypt which is a difficult transition. libya, we obviously know what happened there at benghazi and a country that is unstable. even tunisia isn't doing that well. when you have crisis and chaos there isn't an opportunity for american leadership. what you would need is a president who would have the grand strategy for what do i want to see happen in the world in the next four years and how am i going to get there? >> the strategy seems to be america withdrawal and retreat in the world. we are r going to cut the gash and the defense budget and we are pulling out of afghanistan. we are already out of iraq. we have add do indicated doing anything in syria. the message around the world
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is that the u.s. is going to be much -- it is going to lead a lot less i than it has. >> we had the right strategy. we could have the right strategy and there isn't an opportunity. >> in the 1920s it game clear that the victorious powers of the united states, france, britain weren't prepared to enforce the global order that they had imposed at thefo versailles settlement. and it became obvious to countries like germany and the soviet union that this they could violate with impunity. in 1922 you had two decades leading to the second world wharf this -- war of this regime that wanted to revise the structure of global power and the status quo powers who weren't prepared to enforce it. there was one power and under this administration -- >> is iran the test case for whether or not these countries are going -- europe and the united states and in particular are going to enforce this world order?
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>> look, you have three presidents, president clinton, bush and obama have said explicitly that a nuclear iran is unacceptable. if the iranians are allowed to walk across the flesh hold with no opposition, that will demonstrate to other would t be aggressiveha regimes that there is no comp on the street. and that's what is happening. >> is this the year for the showdown on iran? >> simply is a matter of industrial mechanics, how much uranium you need to enrich. >> we humave been saying that for awhile though. and somehow there is a computer virusn that keeps kicking it down. >> it is not an ever receding horizon. and the international atomic agency takes iran's nuclear stockpiles and how much they have and how deally -- deeply it is spared. you saw benjamin netanyahu draw literally a red line. both american intelligence and israeli intelligence have come
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to a consensus that late in the spring of 2013 you are going to have that threshold moment. >> matt, you have been the op tau miss among our group on the arab spring. you have made a strong case for it, particularly ever a the dictatorships for so many decades in that part of the world. give us some reason to think that this could turn out better than it looks to be turning out now. >> itth is not over. i think what you are seeing, the struggle in egypt on the ground over thet' constitution, over power is not over. i think the worst thing is to write them off because they are somehow genetically ill disposed to democracy. there is a vibrant process inside, but there are decades of authoritarian oppression that have to be worked through and tossed over. it was hard in europe and eastern europe. it was certainly hard in south africa and latin america, but i think there is some hope that the dynamism of the place can carry them through. >> in 50 years it will work out great. >> and there is an
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alternative. >> if there is a theme to what we are saying is the united states has to play an active leadership role rather than a passive leadership role. if the united states is passive and barack obama represents democratic ideas should be more passive, this is the kind of world r that results. i think places like egypt and syria were looking to the united states to at least have a presence. but we have not and we are seeing the result. >> where are the potential flashpoints in this coming year? >> look, there are many. one of them is we don't talk about europe enough. the crisis in europe has not turned a corner. it is going to get dramatically worse. in portugal, spain, italy, there is deepening political dysfunction in the european union. thases one place to look -- that's one place to look. it will encourage russia to make moves of its own. you mentioned south africa. south africa is not going in a
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good direction. it was supposed to be the most optimistic spot on the african continent. i don't see many bright spots. maybe new zealand, but even the new zealand economy is heading south. still ahead, counting down to obamacare. big changes could be coming in 2013 for you and your family thanks to the y president's health care overhaul. we'll tell you what to expect when we come back.
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well, get ready, america, for the arrival of obamacare. key provisions of the mammoth health care overhaulro kick in. the editorial board member is here to tell you what to expect. or as we call the bill, joe, the lifetime employment act.
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so what can we expect this year? >> well, look, the bill ramps up starting in october 2013. so you are going to have three big changes. it is pouring out of the obama administration and regulations creating thiiss law and practice and this is process of adhok improve swraition -- improve vaw swraition. you willat see more resistance in the states. 26 states have said they won't participate and set up these health care exchanged which will be an insurance market. >>ic a regulatory body and this is where the subsidees will come out. you will see dislocation in the states. the third will be consultion in the health care markets. it will adapt to all of this. you are already seeing it.
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they are getting bigger and the doctors and the individuals are joining much largerls practices. everybody realizes when you get hit with new regulation you get hit with new costs. and the bigger you are, the better you are able to weather something like that. >> it is a way to manage risk. the major changes among the providers, it is doctors and hospitals. >> and it is almost impossible to practice as a physician unless you are affiliated with a hospital in someway. what that tends to do is drive up costs. you get local monopolies that can command their own prices. that is contributing to a very, very strong trend in terms of premium for consumers. >> we are also seeing them hit right away to pay for this. even before the benefits kick in for individuals. you are seeing this big medical device tax that dan talked about. you are also going to see the
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big investment tax and the medicare surcharge on individuals. companies are going to start tos now have to calculate what all of this will cost them. are we going to see reductions costs of health care from this? >> no, we are going to see exactly the opposite. insurers are getting checks as well. it will pass through to consumers.e if you look back two weeks ago, the ceo of aetna came out. >> big insurer. >> bins iger and they said -- big insurer and they said expect a big rate increase. 50% in some markets, so there will be a big jump in costs. >> what about the politics of this? the resistance by the republicans to this bill has really defined politics over the last three years. it has been a big part of defining politics. are they going to give up the coast here andef now accommodate themselves to this?
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jay no i don't think -- >> no, i don't think you will see that. it comes down to look at what you just mentioned to the fact there are 26 states and many run by republican governors who are not taking part in these exchanges. there are a lot of republicans who realize that this next year is going to be really big. the law gist cal challenges that the obama administration will face in setting this up almost guarantees there is going to be convulsion and all kinds of problems. i think republicans see this as an opportunities to maybe point out some of the things they have been warning about. unfortunately the americans are going to have to experience it firsthand. >> not only are they going to witness it firsthand, what you are seeing here, franklin roosevelt created the regulatory state in the united states. it is this big social program that has gone forward. barack obama is the heir to the roosevelt legacy.
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and honestly, paul, if you what we are talking about, i think we are beginning to see the implosion of the administrative state. it is simply collapsing under its shear and unsupportable weight. it is going to be ugly and it will begin with obamacare. >> and joe, the i'm plaw men station you are -- the implementation is not going well. >> b no, it isn't. ithi is essentially a catastrophe. >> even democratic governors who support the law are really frustrated with what is coming out of washington. >> that's absolutely right. essentially they are bloody minded and they want to dictate everything out of washington. it is frustrating. even people who support the law because it is so chaotic and ad hok. >> can they kick this down the road a year or two. >> the first year of implementation when people see
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this on the ground is when people say it is important. i wouldn't be surprised they ask for it. i would be surprised if house republicans gave it to them. >> why? >> they are saying this is the pottery barn rule. you broke it. you own it. they are saying if you can't get it up and running, it is your problem. >> then maybe it ought to be repealed. and then we can fight over this in 2014 and 2016. way have to take -- we have to take one more break. when we come back, our hits and misses of the year. and what do you know? they used centrum silver in the study. makes me feel even better, that's what i take. sorry, we take. [ male announcer ] centrum. the most recommended. most preferred. most studied. centrum, always your most complete.
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>>. >> paul: time nor hits and michigan of the year. >> i think an absolute hit to nasa and the people at the laboratories in pasadena for this amazing feat of putting the curiosity big rover pinpoint on the surface of mars to look for signs of planets geologic past. the can do spirit and spirit of curiosity is alive in america like no place else. i hope it carries us forward beyond the plan. >> it's my person of the year is also arguably the most powerful person in the world. she doesn't give many speeches, she is andrea merkel. think she has done more than anyone in the last year to try to save us from an economic
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calamity in europe. it's not perfect solution but she has nudged countries to reform. she agreed to some bailouts to keep it going. if the u.s. survives and we all survive it will be thanks to her. >> my people of the year is new york and new jersey and conduct during hurricane sandy. half of them without power, subways, no gas, scenes looked like out of the dresden fire bombing. civilization didn't fall away. there was no crime or violence and things will be look better not morning. it's a testament to resilience and grace under pressure. >> paul: my piss mis go to john roberts for his ruling that the affordable care act is constitutional. he agreed with the four conservatives that the law violated the commerce clause of the constitution which was the